CEO Obama

CEOs are evaluated on three different criteria: the bottom line, process, and vision.

By Bob Burnett

“Doonesbury has turned against Obama,” my wife wails. It’s not only Garry Trudeau; recently, many progressive commentators have criticized the President, describing his first year in office as a failure. Were our expectations for Obama too high? Or are we using the wrong evaluation criteria?

Ambiguity is built into our system. Americans elect Presidents on the basis of their political prowess and then expect them to transform into competent managers of the nation’s largest bureaucracy; a shift that’s almost certain to guarantee failure. George W. Bush was effective as a politician, but unable to govern — despite his pedigree as “America’s first MBA president.”

The proper standard to use is not whether Obama has accomplished a specific political objective but how he’s performed overall as a CEO. Corporate CEOs are evaluated on three different criteria: the bottom line, process, and vision.

The Bottom Line: CEOs are judged on the basis of whether their company made money in the last quarter and the likelihood it will continue to be profitable. President Obama’s performance can be measured by the state of the economy and how people feel about the future. A year ago, the US economy was in the tank; the fourth quarter GDP decreased by 6.2%. In 2009, the third quarter GDP was up 2.2% and estimates for this quarter are roughly + 4%. Under Obama the economy has improved.

Consumer sentiment is also up 12 points from a year ago. Half of Americans believe the economy is beginning to recover. While only 39% feel the US is headed in the right direction, that’s up 13% from a year ago.

Obama’s “bottom-line” grade = B. While there’s a lot of room for improvement, the US economy didn’t fall into a depression; it has improved.

Process: Management consultant Peter Drucker famously observed, “concentration is the key to economic results;” meaning that successful CEOs focus their energy. In 2009, Obama installed a new management team and accomplished his top three objectives.

In domestic policy, Obama managed to turnaround the economy. In February, Congress passed his economic stimulus package. While 10% unemployment is bad, the situation would have been much worse without the stimulus. What the President failed to do was to remedy the conditions causing the financial collapse; many believe his economic advisers are biased towards Wall Street.

Obama sensed a historic opportunity to reform the dysfunctional US healthcare system and led a yearlong fight that resulted in congressional legislation. It’s not everything that progressives wanted but it’s a landmark accomplishment.

In foreign policy, Obama had to decide what to do about the war in Central Asia. On Dec. 1, after an extensive review of Afghanistan-Pakistan policy, the President announced his plan to send more troops to the region on an 18-month timeline contingent on the performance of the governments of Afghanistan and Pakistan. It’s too soon to know whether this was a good decision.

One of the characteristics of an effective CEO is delegation, using his team effectively. Many presidents can’t do this and, as a result, they micro-manage, or they let one aspect of the federal bureaucracy run everything — typically, the Department of Defense.

On his key domestic priorities, Obama delegated to Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi. They moved his agenda through Congress — Reid more slowly than Pelosi because of the Senate cloture process — and got the high-priority bills passed.

On his Afghanistan-Pakistan decision, Obama delegated to Defense Secretary Robert Gates and Secretary of State Hillary Clinton. Obama made sure he had a full range of opinions expressed and carefully considered them.

One of the characteristics of an effective CEO is pragmatism: don’t let the perfect be the enemy of the possible. Obama had to be pragmatic to get his stimulus bill and healthcare reform package through the Senate.

Obama’s “process” grade = C-minus. Obama has addressed the right issues and delegated effectively. Nonetheless, his economics team appears to favor the interests of Wall Street over Main Street and need to be replaced.

Vision: Effective CEOs ensure there is a meaningful mission statement for their corporation and a long-range strategy. Under George W. Bush, America’s foreign mission was “we’re the world’s police force” and our domestic mission was “get out of the way of the market.”

In 2009, Obama backed away from the ineffective conservative world vision. He understood that other nations must do their part in fighting terrorism and dealing with rogue states. The President recognized that the battles of the 21st century will be fought in the world marketplace not on traditional battlefields. Obama appeared to be working towards a new US mission statement that emphasizes our global competitiveness by focusing on certain strategic markets while strengthening our education system and safety net, reducing energy costs, and enhancing our productivity while pay decent wages.

Obama’s “vision” grade: C-plus. The President said the right words but has yet to translate them into a concrete vision for better-paying American jobs.

Obama’s 2009 CEO grade = C-plus. While America’s new President has potential, his performance needs to improve.

From The Progressive Populist, Febuary 1, 2010

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Bob Burnett is a Berkeley, Calif., writer. Before starting a second career as a journalist, he was one of the founding executives at Cisco Systems. Email